What does the Cycles Fresnel Node do?
The Fresnel node outputs which percentage of light would be reflected off a glossy layer, with the rest being refracted through the layer. The most common use is to mix between two BSDFs using it as a blending factor in a mix shader node.

For a simple glass material you would mix between a glossy refraction and glossy reflection. At grazing angles more light will be reflected than refracted as happens in reality.

For a two layered material with a diffuse base and a glossy coating, you can use the same setup, mixing between a diffuse and glossy BSDF. By using the fresnel as blending factor you're specifying that any light which is refracted through the glossy coating layer would hit the diffuse base and be reflected off that.

For the Cycles node it is assumed that this glossy layer is a simple dielectric material with an index of refraction. Different and more advanced Fresnel equations exist but are not currently implemented. More advanced layering models exist but fresnel mixing is a commonly used approximation.